Corporate credit ratings based on the overall organisational performance

Abstract

A corporate credit ratings methodology based on the measurement of overall organisational performance is defined and explained. The overall organisational performance is then further explained that it can be derived by measuring over-arching indices of stability, resilience and sustainability. The overall organisational performance corresponds to existing ratings scale which shows corporate credit ratings can be given from the derived overall organisational performance for each company. The values of sub-dimensions can be collected and benchmarked from public and private data fields as explained in the embodiments. A collected data points can be benchmarked, weighted and finally index values of stability, resilience and sustainability can be generated leading to overall organisational performance score and its further interpretation into assigning a corresponding credit ratings to a company.

1 . Claim is made that there are conceptual and qualitative problems within the currently prevalent methods of credit ratings methodologies which can be solved by applying this novel invention of measuring overall organisational performance and interpreting such measured performance into a performance scale of 1 to 10 and assigning a corporate credit rating to any company or even non-profit organisation either on a new 1 to 10 scale or to a corresponding symbolic scale of corporate credit ratings. 
     
     
         2 . Claim is made that overall organisational performance can be measured as intermediate level dimensions by three over-arching variables namely stability, resilience and sustainability measured respectively as follows: stability can be measured and a stability index can be created or derived from measures of financial performance, operational performance and stakeholders' satisfaction; resilience can be measured and a resilience index can be created or derived from measures of competitiveness, growth and stakeholders' satisfaction; and sustainability can be measured and a sustainability index can be created or derived from measures of organisational effectiveness, corporate governance and stakeholders' satisfaction. 
     
     
         3 . Claim is made that analysis and measurement of each dimension mentioned in the  claim 2  that is stability, resilience and sustainability can also be utilised for optimum organisational design and further restructuring to allocate human capital and financial capital resources to operations of any manufacturing or service company and also, overall organisational performance measured as mention in the  claim 2  can be then further converted into a performance index and rank the companies according to their measured overall organisational performance. 
     
     
         4 . Claim is made that this invention has a better predictive accuracy of creditworthiness by analysing and measuring overall organisational performance more accurately and precisely with neutrality by applying concepts of stability, resilience and sustainability which increases the validity and reliability of overall assessment of organisation and its performance and ultimately the corporate credit rating derived and assigned based on this overall organisational performance which is a higher order construct in the strategic management having no common consensus about how to identity and to measure it. 
     
     
         5 . Claim is made that machine readable instructions and its sequence can be created in a system of data collection, storage, retrieval, analyses and report generation to derive corporate credit ratings on the sole basis of measuring overall organisational performance with a greater predictive accuracy as compared to existing methods adopted by major credit ratings agencies. 
     
     
         6 . Claim is made that the novelty and originality of this invention to derive corporate credit ratings and credit ratings index on the basis of overall organisational performance measurement contributes to the advancement within the multiple fields of performance management, credit ratings, strategic management and corporate finance.